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No Thanks, Dean Foods

Nearly 500 dairy farmers are up in arms over a legal shakedown with the ghost of Christmas past, Dean Foods.

The estate of the former dairy enterprise is seeking repayment from producers who shipped them milk in the 90-day preference period leading up to their bankruptcy last year. One Pennsylvania producer was sent a $50,000 bill.

How we got here: Within six months of filing for bankruptcy, Dean Foods was snatched up by Dairy Farmers of America [DFA]. A $433 million price tag bought DFA 44 properties that spanned fluid and frozen dairy processing capabilities. But that didn’t stop bankruptcy proceedings and technical legalities now have the estate chasing after former suppliers.

DFA’s not happy:

“We find it extremely disappointing that hardworking dairy farm families are now put in the position of having to incur costs, either in paying the amounts demanded, or obtaining legal counsel to defend themselves against these farfetched claims. We have no connection to the Dean Foods Estate and are disheartened by its actions.”

Timing couldn’t be worse: Record-breaking price volatility is creating a stressful year-end for dairy producers. And this comes on the back of a year when pandemic-related supply chain issues had farmers dumping milk even when food retailers couldn’t meet demand for dairy products.

And the dairy industry is not having it.

A handful of farm and dairy groups are stepping up to bat to defend the dairy community.

American Farm Bureau demanded the Dean Foods’ estate lawyers back off:

“Shame on these predatory lawyers for bullying dairy farmers at a time when many are struggling to keep their farms running. Someone needs to have the farmers’ backs and I’m proud to say AFBF is stepping-in to do just that,” noted Farm Bureau President, Zippy Duvall.

Where this goes: Expect a legal showdown in the weeks to come.